There are several reasons why a company may choose to operate in stealth mode. The technology they are working on may need more testing and development; the founders may want to raise more money; their potential consumer base needs to be adequately understood and marketed; or the company may be preparing for a big launch event to capture the public’s attention – emerging out of anonymity with a bang.
Stealth mode companies can often portend new technologies or services, so it’s worth looking into what some Israeli companies that are (or were) in stealth mode are up to. Start-Up Nation Central is tracking some 6,060 currently active tech companies – companies with their own tech product or R&D. This doesn’t include service providers like outsourced development shops.
We define stealth mode companies as a company whose name is officially registered with the Israel Corporations Authority but may lack a website with any of its information publicly visible. Sometimes the stealth mode company’s founders won’t list the company on their LinkedIn profile.
As of June 2018, we’re tracking some 450 companies that are currently in stealth mode. This is around 7.6% of the entire start-up universe that we track.
How many and for how long?
How many companies in or out of stealth mode are being founded each year? If we consider the founding year of all companies that we know have been in stealth mode at some point – whether they currently are or have moved out of it – and compare it to the overall number of companies founded each year, we can see that a sizeable chunk of the companies founded each year started off in stealth mode.
Companies will remain in stealth mode for months or years, depending on their challenges, products and overall needs. We explored how long companies waited before coming out of stealth and listing themselves on Finder. We tracked, by sector, the median number of months companies that started in stealth mode take to leave stealth mode, and we learned some interesting things: software and security – two of Israel’s most well-known specialties – have a median exit time of about a year. The median time in stealth across all Israeli tech industries is 14 months. It’s often easier to develop a piece of software (13 months) than, say, a new industrial technology, which has a much higher median (21.5 months). By industrial technology, we’re mostly looking at smart manufacturing in the Industrial IoT space.
By their very nature, stealth companies are trying to avoid attention. Still, a lack of public presence on the web and social channels seems to be a strong indicator that a company that we know has already formed, is operating under the radar. Hence, we do not publish their corporate information on Start-Up Nation Finder. No data is perfect. Our organization was founded five years ago, and it is only in the past 2-3 years that we have started to track stealth companies extensively. It is unlikely that we have found every stealth mode company in the ecosystem. Therefore, we don’t claim that the numbers we’re showing are exact or ironclad – just that they’re indicative of certain trends and patterns.